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Expert tax for foreigners

Possibilities of tax reduction

tubbs
post 29.Aug.2016, 09:49 AM
Post #1
Joined: 29.Aug.2016

Hi there,

I have been offered a job opportunity in Sweden and is right now looking through the web to find information on tax.

I stumbled across an article on expert tax and also so older discussion threads here on the topic. However as I understand it they have changed the application process a few years back to focus on your salary as a means to determine your eligibility.

I have a few questions that I hope some of you would be able to help me with.

1) It says that the person is not intended to stay in Sweden for more than 5 years, anyone had any experience with staying more than 5 years, would you have to pay back your tax relief? - Has anything been written on this from the tax authorities or other public bodies?

2) I expect to be hired on a permanent/local contract would that disqualify me for the expert tax relief as I guess the intention is for the job to be temporary in nature?

3) Would the employer need to advised on your intention to apply for the expert tax relief?

Hope that someone has experience with this and would be able to help me out with my questions.

Thanks very much

Best regards,

Tubbs
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yet another brit
post 29.Aug.2016, 11:20 AM
Post #2
Joined: 5.Jan.2013

I have some experience of this, as having previously been a line manager of people eligible, albeit before the last change in the rules in 2012. But I hope this is still relevant. Unfortunately I moved to Sweden too early to get it myself...

First, the criteria are either/or - either a high salary (more than 2 x basbellopp/ month, which right now be 88.6 tkr/month) or being a foreign expert/key person (and where the company can demonstrate that the competence could not be found in Sweden). The processes are separate for the two.

1) It says that the person is not intended to stay in Sweden for more than 5 years, anyone had any experience with staying more than 5 years, would you have to pay back your tax relief? - Has anything been written on this from the tax authorities or other public bodies?

To be here working for up to five years, but more than two, you will have to be on a permanent ("until further notice") contract in any case. Being on a permanent contract should not therefore of itself make you ineligible, nor have I heard of anyone [in the "expert" category] being asked to repay if they stay longer, and I certainly know people who have been in that position. However, it is important that there is an original stated intention not to stay longer.

2) I expect to be hired on a permanent/local contract would that disqualify me for the expert tax relief as I guess the intention is for the job to be temporary in nature?

See above.

3) Would the employer need to advised on your intention to apply for the expert tax relief?

Absolutely, in fact impossible without since it is a joint application referring to a specific employer/employee relationship. And you will not get it without the employer providing supporting statements. Also note that it has to be applied for within three months of arrival. Either the employer or the employee can apply.

In my field, the effective criteria for "being an expert" is having a PhD and/or MD in a specific field. Even if that doesn't apply, get your employer to write a letter saying why they employed you, what your unique qualifications are, and note that they couldn't find anyone in Sweden.

It is in the employers interest for this to happen, as they get tax breaks too (moving and relocation costs are deductible)

Good luck!
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LLHope
post 29.Aug.2016, 11:27 AM
Post #3
Location: Stockholm
Joined: 1.Jan.2014

Read this, this is the body where you have to apply for tax relief:

http://skatterattsnamnden.se/forskarskatte...a800018147.html




And YES! The Tax Authorities do say they will back-date (re-state) tax demands if you stay over 5 years.
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Temp
post 29.Aug.2016, 11:31 AM
Post #4
Location: Stockholm
Joined: 14.Jun.2006

...if you dont qualify for expert tax relief, then you might find normal tax is not *so* bad.

Hopefully you've found one of the online tax calculators, if not, here's one:

https://rakna.net/berakna/lon-efter-skatt/

Stick your monthly pre-tax salary in the first box, type in the tax area you're be living in in the next (or just the city and then randomly pick if you don't know), inkomst år (income year) of 2016, uncross the "medlem i svenska kyrkan" (unless you want to pay optional extra money to the Swedish church) and click on "Beräkna".

Then you'll get a "Du får XX XXX kr i månaden efter skatt" message, where the XX XXX kr is how much you'll get after tax.
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wallace1837
post 29.Aug.2016, 06:41 PM
Post #5
Joined: 21.Oct.2012

QUOTE (LLHope @ 29.Aug.2016, 11:27 AM) *
And YES! The Tax Authorities do say they will back-date (re-state) tax demands if you stay over 5 years.

Different source, different conclusion: here they say NO! You don't have to pay back if you stay longer than 5 years. http://www.business-sweden.se/contentasset...n-employees.pdf
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yet another brit
post 29.Aug.2016, 07:21 PM
Post #6
Joined: 5.Jan.2013

As I said above - it seems to be the original intention that is important. The rules say "designed for" or "avsedd för" - as opposed to "explicitly are only for" etc...

But if they catch you trying to pull a fast one, be ready to defend.
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wallace1837
post 29.Aug.2016, 08:06 PM
Post #7
Joined: 21.Oct.2012

It is easy when you are non EU. You visa is valid for up to two years, renewable at 2 years for another two. During that whole period (4 years) you don't have the right to stay longer than the 5 years limit.
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Båg Såg
post 30.Aug.2016, 07:52 AM
Post #8
Joined: 1.Jun.2016

I am pretty sure that if you stay longer than 5 years you do not have to pay it back.

I applied and was refused on the grounds that my expertise was not closely enough related to research. They said the role had to be research based or new product development (R&D).

I have full employer support with letters stating my role was impossible to recruit in Sweden and that they had a permanent ad trying to recruit more people with similar experience.
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LLHope
post 31.Aug.2016, 09:02 AM
Post #9
Location: Stockholm
Joined: 1.Jan.2014

QUOTE (wallace1837 @ 29.Aug.2016, 05:41 PM) *
Different source, different conclusion: here they say NO! You don't have to pay back if you stay longer than 5 years.
Apologies, I had in my head the original discussions back when it was first coming into being, when the different scenarios were thrown around biggrin.gif ...I checked with my tax contact in Skatteverket, the position is that since the legislation doesn't specifically have any consequences for staying over 5 years they take the original advance tax decision of tax reduction into account, based upon the original intention (to not stay past 5 years) and for the moment do not see any basis to retrospectively tax.

You should also look into the combination of all other legitimate tax incentives for foreign workers, e.g. This reduction, SINK, net pay agreement, advance payment of salary before arrival into Sweden, in combination and with reference to taxation agreements. Especially if you do not see yourself being here for too long (6 months etc...).

Why? ... Well, if you have a net pay agreement the tax is calculated on the Net amount, plus a roll-over of tax into the following tax year. If you can get the advance ruling of reduced tax for researcher/specialist, then you are only then taxed on 75% of that. If you get it paid in advance (depends upon your company) you would not be resident in Sweden, therefore taxed at Swedish 20% SINK rate (effectively 15% if you get the 75% of income taxable ruling, even less if you have a net pay agreement). You need to double check any taxation agreement between Sweden and where you are currently tax resident, the norm in those is that you can deduct tax paid in one of the parties from tax due in the other. Use your imagination...

QUOTE (Båg Såg @ 30.Aug.2016, 06:52 AM) *
They said the role had to be research based or new product development (R&D).
A fast track was introduced some years ago, if your expected salary is 2x basis or more (approx. 89.000:-/m) you are automatically entitled to the reduction, regardless of research requirement etc. This was to encourage companies to place Senior roles here in Sweden after heavy lobbying from Businesses.
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RAFS
post 21.Sep.2017, 11:25 AM
Post #10
Joined: 14.Sep.2017

Does applying for this tax relief cause problems in getting PUT or citizenship down the track?

A link posted above says:
QUOTE
Individuals who are granted tax relief are generally not expected
to reside in Sweden for more than five years. However, if circumstances change, an individual may remain in Sweden after five years without incurring any penalty for
the three years of tax relief.


So apparently it's possible to stay for more than 5 years, but would MV's position be that the employee doesn't qualify for PUT after 4 years, since he didn't intend to settle in Sweden from the start? (And who knows when he started intending to?)
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